Food group Kerry saw revenues drop by almost 10 per cent in the first quarter of its financial year as prices fell and the company felt the impact from disposals and foreign currency exchange.
The group also announced a new €300 million share buyback programme, due to be completed by the end of the year.
Consumer demand was “relatively subdued”, the group said, with volumes rising 1.9 per cent overall. That was offset by a 5.3 per cent decline in pricing, and a 5.1 per cent decline in revenue due to the disposal of certain business units.
The group’s EBITDA margin improved by 140 basis points, supported by cost efficiencies and portfolio enhancements.
The dairy Ireland unit saw volumes decline 3 per cent, hit by overall softer supply across the market, while pricing fell 13.7 per cent during the period. Kerry said this was in line with expectations.
The taste and nutrition unit saw priced decline by 3.9 per cent decline, while volumes rose 3.1 per cent during the period. Growth in the business was supported by stronger food service activity, with volume growth of 8.6 per cent, and led by the snacks, meals, meat and beverage markets.
“We are pleased to report a good start to the year given market dynamics,” said chief executive Edmond Scanlon. “Taste & Nutrition achieved good volume growth driven by a strong performance within our food service channel and we delivered strong margin expansion in the period reflecting the continued development and evolution of our business. Consumer market dynamics remain similar to those outlined at our full year results.”
The group also saw volume growth in the Americas and APMEA regions, with food service performing particularly strongly. However, a combination of softer market conditions and stronger comparatives saw volumes in Europe fall slightly.
Kerry also completed the acquisition of part of Novonesis’ global lactase enzyme business, enhancing Kerry’s enzyme manufacturing footprint.
Looking ahead, the company said it expected adjusted earnings per share to grow 5.5 per cent to 8.5 per cent growth, up from previous guidance of 5-8 per cent, taking the new buyback programme into account.
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